The Australian share market has resumed its slide as investors react to sharp falls on Asian markets amid concerns over China’s economy.
Shares opened higher but fell away in afternoon trade to close more than one per cent lower, with the big banks – especially ANZ and Westpac – and global miner BHP Billiton weighing in the market.
The local bourse has closed higher in only two sessions so far this year – the latest being Tuesday.
“It hasn’t been a good day in Asia, unfortunately,” IG market strategist Angus Nicholson said.
“We did have a better start earlier in the day, but, boy, has it come off.”
The drop on the local market was seemingly driven by a big sell off on Asian markets, especially Hong Kong where the local currency fell to its weakest level since 2007.
“Today, Chinese markets have opened down, and all regional markets have followed them down, with the pain being focused on Hong Kong,” he said.
“Markets have probably digested the GDP statistics (out of China) now and have probably come to the conclusion that barring further stimulus from China, things are probably going to get pretty messy in the first quarter.”
ANZ copped a hammering because it had significant exposure to Asia, Mr Nicholson said, and investors are also generally negative towards the banks.
ANZ fell $1.09, or 4.4 per cent, to $23.50, Westpac shed $1.12 to $30.06, National Australia Bank dropped 29 cents to $26.74 and Commonwealth Bank lost $1.58 to $77.61.
BHP Billiton fell 52 cents, or 3.5 per cent, to $14.21 after announcing another $1 billion hit to its bottom line, and lowering its annual iron ore production target.
The mining giant’s half year results will include writedowns worth $US911 million ($A1.32 billion), related to redundancies and closures and a revaluation of its copper business.
Rio Tinto descended $1.07 to $37.75, and Fortescue Metals slumped seven cents to $1.46.
There were some gains in the retail sector, with Woolworths adding 23 cents to $23.58 and Coles owner Wesfarmers up 35 cents to $40.05.
KEY FACTS:
* At the close the benchmark S&P/ASX200 index was down 61.6 points, or 1.26 per cent, at 4,841.5 points.
* The broader All Ordinaries index was down 58.2 points, or 1.17 per cent, at 4,896.9 points.
* The March share price index futures contract was down 46 points at 4,802 points, with 47,472 contracts traded.
* National turnover was 1.96 billion securities traded worth $5.56 billion.
